The situation could turn "dicey" for emerging economies in Asia if the benchmark 10-year U.S. Treasury yield hits 3.5 percent, according to an expert from Europe's largest bank.

Many Asian emerging economies have attracted large amounts of foreign investments into their local bond markets, and an uptick in the yield of the 10-year Treasury could reverse that flow, explained Frederic Neumann, HSBC's co-head of Asian economics.

But the good news for those countries is that the 10-year Treasury yield has remained below 3 percent so far this month, which suggests that investors don't see inflation picking up in a big way in the U.S., Neumann told CNBC's Nancy Hungerford on Tuesday.

"Fundamentally, the market is not yet convinced that we're going to get a long-term acceleration in U.S. inflation, and that matters greatly for emerging markets, which have become a lot more dependent on inflows into local bond markets," he said.

The 10-year Treasury yield settled at 2.9553 percent on Monday.

Neumann said as long as the 10-year yield stays around current levels, investment flows into and out of emerging markets should stabilize.

His comments come as several Asian economies, including India and Indonesia, have seen investors withdrawing from their capital markets as U.S. Treasury yields climb.

Both India and Indonesia were victims of the 2013 "taper tantrum" and are again at risk of large capital outflows — which will hurt their growth prospects. Those worries have led to their currencies, the rupee and the rupiah, to depreciate against the U.S. dollar this year.